HUD 221(d)(4) Statutory Limit
Loan sizes for HUD 221(d)(4) projects are constrained by "statutory limits." These limit the maximum size of a loan depending on the number of units in the development. This amount can then be multiplied by what's referred to as a "high cost multiplier," (typically more than 200%, and applying to different areas based on their individual property costs) in order to determine the maximum loan amount.
For example, the Los Angeles and New York areas each have a high cost multiplier of 270%. In contrast, the Atlanta area has a high cost multiplier of 258%. And, the special high cost areas Honolulu and Anchorage each have multipliers of 405%.
HUD 221(d)(4) Statutory Limit Examples
Section 220: Housing in Urban Renewal Areas
HUD 221(d)(4) Moderate Income Housing Limits
Section 220 Limits Can Be Used With HUD 221(d)(4) Loans
If you're a developer who’s considering building or rehabilitating a multifamily property in one of HUD's specified urban renewal areas, or, alternatively, in specific areas that have been sponsored/identified by local governments as revitalization areas, you may be able to use HUD Section 220 limits. These limits allow developers to take out slightly larger loans per unit. Plus, these limits also permit developments to have slightly more commercial income than would be typically allowed for traditional HUD 221(d)(4) loans.